In Re a Member of the State Bar of Arizona, Kleindienst

FELDMAN, Justice,

concurring in part, dissenting in part.

I concur with the finding that respondent violated DR 1 — 102(A)(4) and (5) and that he should be disciplined for these violations. I write to express my opinion that respondent has been treated too leniently. Considering the nature of these transactions and of respondent’s past record, he should be disbarred.

I recognize that the recommendation of the State Bar is entitled to serious consideration and I would ordinarily not deviate from its recommendation. However, as the majority opinion points out, this court is the ultimate trier of both fact and law in disciplinary proceedings (In re Moore, 110 Ariz. 312, 313, 518 P.2d 562, 563 (1974)) and is also required to use its independent judgment in determining the discipline appropriate to the circumstances of each case. In re Steward, 96 Ariz. 49, 55, 391 P.2d 911, 915 (1964). In this case, I believe the Bar recommendation is too lenient because it has failed to consider respondent’s participation in this entire transaction as part of the circumstances to be considered in imposing discipline. Further, both the Bar and the court have failed to give proper consideration to one of the prime purposes of disciplinary proceedings.

THE INSURANCE FRAUD

There is considerable controversy with regard to just how deeply respondent was involved in the insurance scam which gave rise to these charges. He claims that he was a dupe and a tool rather than a perpetrator of fraud, but an examination of the record makes it impossible to accept that contention in toto. True, the evidence is not clear and convincing that respondent had precise knowledge of the encumbrance on the funds which were being transferred *103back into Family Provider’s name. For that reason, the court properly finds that the violations of Counts 2 and 6 have not been proven.

Beyond question, however, respondent did know quite a bit about what was happening. Taking the evidence in a light most favorable to him, respondent did know that he had been paid one-half of a $250,000 fee in order to influence Frank Fitzsimmons, the Teamsters President, to place the Teamsters Welfare Fund’s group life insurance policy with a company called Old Security, rather than with the Prudential. In the course of this “work,” respondent learned that while initially he had been “retained” to work for and help Old Security get the insurance business, he had actually been working for Great Pacific, the parent of Family Provider which was to be the alleged reinsurer for Old Security. Thus, at the time his “fee” was paid, respondent knew that he had been given $125,000 for five hours’ work in using his influence to get the president of the union to “persuade” the officers of the union’s welfare fund to place the fund’s business with Old Security, which was then going to reinsure with Family Provider. Respondent then learned that Family Provider had written no business of any kind for some time. Respondent learned soon after that his client’s subsidiary, Family Provider (the alleged reinsurer) had suddenly come into a great deal of money. Since respondent knew from the inquiries of the Arizona Insurance Department that Family Provider had no other income, he must have known that at best this money had to be the reinsurance premium on the Teamsters’ deal. He then learned that Family Provider had declared a dividend in almost the same amount to its parent and his new client (Great Pacific), which was using the money in an attempt to buy the assets of another insurance company (GALICO), which had no relationship whatsoever to the business being written. Family Provider would thus be left with no funds or reserves for payment of the reinsurance claims.

Respondent had all this information by the time of the hearing before the insurance department. It never seems to have occurred to respondent that a lawyer ought to question the ethical propriety of these transactions and, if unsatisfied about the answers, ought at least to withdraw. See DR 7-102. These questions did occur to the lawyers who had initially incorporated Family Provider and who, with much less knowledge than respondent, were able to suspect something wrong. These lawyers started asking questions, and, when the answers were not satisfactory, decided that they wanted no part of helping this scheme to fruition. They were persuaded to stay in the matter by assurances from respondent.

Not only did respondent persuade the other counsel not to withdraw, but he allayed some of the suspicions of the Director of Insurance by saying at the hearing that he, Kleindienst, would personally see to it that when Family Provider got the funds back it would not again expend them without notice or approval of the Director of Insurance, but would maintain reserves for payment of claims. After making that assurance, respondent did nothing further and, in fact, the funds disappeared again after the hearings were concluded. The record of respondent’s activities in this entire matter constitutes a tour de force of ethical legerdemain. Through it all, respondent maintained steadfastly that he had no knowledge that anything wrong was being done because he relied upon Hauser, and saw nothing untoward in the transactions. Respondent seems to have been alone in this conclusion.

The record establishes that respondent attempted to walk the line between ethical practice and participation in a scam; that he had much to gain and therefore sought to hear no evil, see no evil and speak no evil. As with most who attempt to walk such a fine line, he fell off on the wrong side of the divide and eventually gave false testimony under oath.

This alone warrants imposing severe punishment. However, we must remember that only two or three years before he became involved in the insurance scam, re*104spondent was censured by this court for having become involved in similar problems.1

THE PAST RECORD

On March 16, 1974, in United States District Court, respondent entered a plea of guilty to violation of 2 U.S.C.A. § 192 (1938), thereby admitting that he had knowingly failed to give accurate and complete answers to questions propounded to him while he was testifying under oath before the Senate Judiciary Committee at hearings which involved respondent’s confirmation as Attorney General of the United States. In October of 1974, in disciplinary proceedings which arose from that plea, the Arizona State Bar Board of Governors found that Kleindienst had knowingly given inaccurate, evasive or incomplete answers under oath to four series of questions involving the litigation between the United States and International Telephone and Telegraph (ITT).

In the proceedings now before us, respondent has attempted to make light of his past record. It is not so easily to be dismissed, and our rules permit us to consider it.2

In the various bar proceedings3 which arose from respondent’s testimony about the ITT cases, it was concluded that Mr. Kleindienst had failed to disclose and had misrepresented the facts while testifying under oath at the Senate hearings. Because his actions had not been taken for personal gain and he had eventually refused to follow the President’s direct order, he was merely censured for his lack of complete truthfulness. We make witnesses swear that they will tell “the truth, the whole truth and nothing but the truth,” and when they fail to do so, we charge them with perjury. Here we have a lawyer who, by his own admission, had failed to tell the “whole truth” and who received only a censure because he had not committed the wrongful act for his own personal gain. That mild, lenient treatment seems not to have made any impression on respondent, for only two years after that censure, he became involved in the insurance scam with the result that he again failed to tell “the truth, the whole truth and nothing but the truth” while under oath.

THE PURPOSE OF DISCIPLINE IN THIS CASE — MAINTENANCE OF THE INTEGRITY OF THE PROFESSION

If, as the court finds — and I concur in the finding — there is clear and convincing evidence of perjury, then despite the jury acquittal, we must .assume that respondent did commit the act of perjury and impose proper discipline for that act. Of all the offenses which a lawyer can commit, untruthfulness in judicial proceedings is one of the most egregious. Lawyers are required to be truthful in their practice even when not under oath. See DR 7 — 102(A)(3) through (7); Fabrication or Suppression of Evidence as Ground of Disciplinary Action Against Attorney, Annot. 40 A.L.R.3d 169 (1971). It is even worse when a man who has been Attorney General of the United States, and whose conduct should therefore be an example to the public and all other lawyers, commits these violations.

*105Had there been no past record, I might still feel that a one-year suspension for perjury was too lenient. We have imposed worse to protect the public against lawyers who have done much less.4 When perjury has been accompanied by at least some degree of knowing participation in a fraud and when we add to this the fact that only two years before respondent had received lenient treatment for conduct which was, at best, close to perjury, we may legitimately conclude that we are dealing with a man who certainly did not learn his lesson from the first discipline. The record before us, which contains neither a word of contrition nor any acknowledgment of wrongdoing from respondent, must raise doubt on the question of whether respondent has learned his lesson even now. To show further leniency by suspending respondent for only one year would be tantamount to recognizing, if not legitimizing, the idea that members of this profession may with relative impunity obfuscate the facts, conceal the truth, close their eyes to fraudulent schemes which they help bring to fruition, split fees, peddle influence, and lie under oath. This is conduct which in the most fundamental manner “adversely reflects on his fitness to practice law.” DR 1— 102(AX6).

The majority holds that the purpose of discipline is not punishment, but, rather, protection of the public from the offender and deterrence of others. The one-year suspension may or may not satisfy these purposes. No doubt it will have a serious practical effect on respondent’s future ability to practice law successfully. However, it will not serve another purpose, which I think is of equal importance to those mentioned in the majority opinion.

Over the years, ... court decisions, while reaffirming the breadth of discretion, have nevertheless focused on a few salient considerations in determining the appropriate punishment in disciplinary proceedings. These are principally: the maintenance of the integrity of the profession in the eyes of the public, the protection of the public from unethical or incompetent lawyers, the deterrence of other lawyers from engaging in unprofessional conduct ....

District of Columbia Bar v. Richard G. Kleindienst, 345 A.2d at 150 (quoting Hearing Committee Number Three, Report to Disciplinary Board, Bar Docket No. 3—74B at 23) (emphasis added).

The kind of conduct in which respondent has engaged is not worthy of comparison to the practice of law by the vast majority of lawyers who work hard, attempting to the best of their abilities to advance and represent the interests of their clients in a legitimate, ethical and professional manner. The Bar and this court should do more than administer another slap on the wrist to respondent. He should be disbarred, thereby making it clear to the public that this court and the profession as a whole recognize and will maintain the distinction between the practice of law and the practice of anything you can get away with. There are already too many people (and some lawyers) who believe that a good lawyer is one who can produce results through chicanery, deceit, fraud and sharp practice. We cannot “maintain the dignity of the profession in the eyes of the public” — and of the Bar — unless we make it clear that they are wrong.

. In the Matter of a Member of the State Bar of Arizona, Richard G. Kleindienst, No. SB-60 (Sup.Ct.Ariz.1974).

. Rule 38(a), Rules of the Supreme Court, 17A A.R.S.

. The factual background of the ITT case is contained in the reports of the Arizona State Bar Board of Governors, on file in In re Kleindienst, supra, and the Hearing Committee of the District of Columbia Bar, referred to in District of Columbia Bar v. Kleindienst, 345 A.2d 146 (D.C.App.1975). In the District of Columbia proceedings, Kleindienst was suspended for thirty days for violations of DR 1-102(A)(4), “by virtue of misrepresentations and dishonest conduct prejudicial to the administration of justice.” This finding was grounded on Kleiridienst’s “direct and repeated misrepresentations in answering persistent inquiries about White House involvement in Justice Department litigation against ITT.” 345 A.2d at 146. The District of Columbia Bar had recommended a one-year suspension, but, in part because Arizona had only imposed censure, a majority of the court reduced the suspension to 30 days.

. See, e.g., In re Egan, 127 Ariz. 105, 618 P.2d 599 (1980) (negligently failing to pursue client’s claim with the result that default judgment was entered, resulting in one year’s suspension); In re Stout, 122 Ariz. 503, 596 P.2d 29 (1979) (indefinite suspension for failing to pursue client’s interest where lawyer failed to do so because of mental problems); In re Wetzel, 118 Ariz. 33, 574 P.2d 826 (1978) (indefinite suspension for filing malicious, unmeritorious fee collection actions); In re Kastensmith, 104 Ariz. 390, 453 P.2d 961 (1969) (two years’ suspension for misrepresenting to clients that complaints had been filed when in fact they had not).